Raymond Wong told investors over a webinar that small-and mid-caps Asian equities could be a more preferable way for investors to access certain thematics, like electric vehicles (EV).
But why not invest in the pure play EV stocks in the large cap universe?
Raymond explained that the eventual winners in the electric vehicle space is still not entirely certain. For some of these large-cap EV stocks, he also struggles to make sense of the valuations
We need to project our earnings up to and beyond 2030 to justify some of the valuations today and, actually, we can't really justify why to invest in a large-cap EV stock with a USD 70 bn+ market cap which today generates zero revenue.
So rather than invest through the large caps, Raymond believes he can play the EV thematic through some small-and mid-cap stocks.
Here are some examples.
Firstly, he invests in a South Korean company which is a material supplier to the Korean battery industry that is taking market share from Japanese suppliers.
Secondly, he also invests in a Chinese company becoming the global leader for battery housing for electric vehicle batteries. That company has defeated
German peers to be the sole supplier for Volkswagen's electric battery platform in Europe.
The third company is a Malaysian company that is taking market share in the automotive lighting sector. “If you think about what is important for EV manufacturers, they need to focus on three things: energy efficiency, unique design and product differentiation. We believe lighting is going to be a key part of that,” says Raymond
About Raymond Wong
About Raymond Wong
Raymond Wong is a Portfolio Manager and Analyst within the Global Emerging Markets and Asia Pacific Equities team. He is a Portfolio Manager for Asian equities and the UBS Asian Smaller Companies Fund. He is based in Singapore.
As an analyst, he covers Asian small/mid-cap stocks and Japanese autos/auto-parts, energy, shipping/shipbuilding and trading companies.
Prior to joining UBS Asset Management in 2008, Raymond was an analyst / portfolio manager with Spencer House Capital Management. He started his fund management career at John Govett (renamed AIB Govett), and subsequently at various other fund management firms, where he focused on Japanese investments for long-only and absolute return/hedge funds.
Raymond has been in the Asia Pacific financial services industry since 1998, including roles as a securities regulator and as a management consultant.
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